Small business agency assists 200 000 entrepreneurs

Wednesday, October 21, 2009

Cape Town - Almost 200 000 potential and existing entrepreneurs were helped by the Small Enterprise Development Agency (Seda) in the last financial year.

This was an increase of 7.3 percent over the previous period, said the organisation's chief executive Hlonela Lupuwana.

Lupuwana was briefing the National Council of Province's Select Committee on Trade and International Relations on Wednesday after the release of Seda's annual report.

Lupuwana said 199 830 potential and existing small businesses accessed the agency's offices - which included 42 branches - in the 2008/2009 financial year.

In all 46 695 clients needs were assessed and 14 373 were assisted with various interventions - with business planning, business registrations, co-operatives support and access to markets being those interventions most in demand.

The Seda technology programme assisted 835 small businesses with a total turnover of R129 million, through its network of 27 incubators. The programme also helped to create 224 new small enterprises, said Lupuwana.

Two news incubators had been established under the programme, which is currently ringfenced under the Department of Trade and Industry, but will now fall under Seda, she said.

The Community Private Public Partnership (CPPP) programme, which aimed to offer support to co-operatives and community-owned projects, had also been revived in the last year.

Lupuwana said a random survey of 902 clients had revealed that 80 percent of clients found the assistance offered by Seda had had a positive effect on their business.

The survey also revealed that 40 percent of clients that visited Seda branches did not end up starting a business. This had resulted in only a very few of those that visited centres being assisted with business support, she said.

Seda's support had come amid limited resources and despite a six-month moratorium on the provision of all services by the agency to small enterprises, said Lupuwana.

She said the limited budget was a "major problem" in terms of meeting the agency's targets. The agency received R331.2 million for the current financial year.

She said key to widening Seda's support on a limited budget would be the partnerships it could forge with key partners such as provincial and local governments.

In the Eastern Cape a number of municipalities had donated buildings and paid for rent so that Seda centres could be set up there.

The committee applauded Lupuwana on effecting a successful turnaround strategy and the chairperson of the Seda board Linda Mngomezulu said the agency was granted a clean audit by the auditor general. This followed the qualified audit opinion that it received for the 2007/2008 year.

"The internal issues are no longer an issue anymore," said Mngomezulu.

Lupuwana said the focus of Seda had shifted to monitoring and evaluating the support the agency gave to entrepreneurs.

In this regard the Finnish government was helping Seda to set up an IT system to track the performance of clients the agency assisted.

Lupuwana said a hotline launched last month by Seda on behalf of business owners to tackle late-paying government departments was running well.

The hotline had been able to resolve outstanding payments by departments to contractors, in between five to seven days.

Another key focus of Seda was on capacitating business advisors inhouse.

The board had taken the decision to limit the use of consultants to the supply of more technical services and to 20 percent of all services offered by Seda. The remainder of the services would be offered by inhouse advisors.

Consultants would also be graded as to what part of the market they will be able to assist.

Last Friday, a group of 25 business advisors embarked on a seven-day visit of
Taiwan, where they were expected to gather more diagnostic skills and training on how to better assist business owners.

Lupuwana said another group of 25 advisors was expected to visit Brazil later this year.

She said the visits were a cost-effective way of supporting advisors as Seda only had to pay for "minor expenses".